Portland gets some Rose Quarter revitalization ideas, as well as some caveats

Revitalize the Rose Quarter It's Friday night at the Power and Light District, a shiny new eight-block redevelopment project that sits on what was once a blighted dead zone abutting downtown.The Cordish Companies, a privately held development company from Baltimore, has built comparable blocks in Baltimore and Louisville. Now the Portland Trail Blazers are hoping the company can revitalize the Rose Quarter in a similar fashion.

KANSAS CITY Mo. -- Snatches of music from 10 bars reverberate through the courtyard, competing with the DJ spinning beats on the main stage.

Flat-panel televisions and video screens pulse insistently as small groups of partiers wander between nightspots or kick back by the fire pit to watch the Royals game on the JumboTron.

Julie Denesha/Special to The OregonianSigns from bars and restaurants light up the Power & Light District, an eight-block entertainment district that sits on what was formerly a blighted no-man's land in downtown Kansas City, Mo.

It's Friday night at the Power & Light District, a shiny new eight-block redevelopment that sits on what was once a blighted dead zone abutting downtown. The district was decades in the making, an on-again, off-again desperation move by a city hollowed out by urban sprawl.

On this evening at least, under the influence of a carefully programmed sensory barrage, the strategy seems to be working as the crowd gets into its booze-fueled groove.

"Any place should have a place like this," gushes Shawn Burkhardt, a 22-year-old from Topeka, Kan., eyes wide and beer in hand. "Definitely, in Kansas City, this is the spot to be on Friday and Saturday night. I guarantee it."

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"This spot" is Kansas City Live, a kind of entertainment food court that sits on one block at the heart of the Power & Light District. The Cordish Co., a privately held development company from Baltimore, has built comparable districts in Baltimore and Louisville, Ky. Now the Portland Trail Blazers hope the company can revitalize the Rose Quarter in a similar fashion.

At first glance, the area is corporate hip, a formulaic mixture of "entertainment concepts" that seems out of step with Portland's homegrown sensibilities.

Yet Cordish says the $850 million Power & Light District attracted 8 million visitors to downtown Kansas City last year -- 28 percent from more than 100 miles away. Backers say they can adapt something uniquely Portland for the Rose Quarter and provide a catalyst for the convention center and other developments.

"We can't pick up what's in Kansas City and plunk it down here," said Larry Miller, president of the Blazers. "It would have to be specific to Portland.

Paul Bellman, a 45-year-old from North Kansas City who was relaxing under a heat lamp in the Live block, is hardly an expert. But he says the concept might travel well.

"This is really cool," he said, "as long as you have the business and the local demand to make it profitable."

And there's the rub. The year-old Power & Light District is hemorrhaging taxpayer money. Opened amid an economic free fall, leasing rates and sales taxes have failed to hit city projections. Cordish has sued Jackson County to lower its property tax assessment in the district and has developed a local reputation for hardball negotiating and tin-eared community relations.

Meanwhile the city, which issued $295 million in bonds to pay for infrastructure and some building costs, has been forced to dip into its general fund to cover its debt service.

Kansas City Mayor Mark Funkhouser, who is seen by the business community as anti-development, is philosophical about the district, launched during his predecessor's tenure. It's a "good product," he said, and it's nice to have crowds of people and night life where none existed before.

But he doesn't believe government should be building bars and restaurants. And as a former city auditor, he harbors few illusions about the economics involved.

"It's never going to make money," he said. "I can't imagine how it could make money."

Though other Kansas City officials are more optimistic, Funkhouser cautions Portland to seriously consider what problem it's looking to solve before risking a similar venture.

Sprawl city

In the three decades when Portland was redeveloping its urban core and earning a national reputation for controlled growth, this Midwestern metropolis was becoming a poster child for sprawl. Rings of strip-center suburbs robbed the city of its wealthiest residents and its downtown core of any life.

A 2002 survey by The Kansas City Star found that more than half of metro-area adults had visited downtown two times or fewer in the previous year. It had become an isolated island of office buildings cut off from the city's southern sprawl by blocks of abandoned buildings and surface parking lots.

"The Power & Light District has fundamentally changed our downtown for the better," said Jon Copaken, principal in a prominent commercial real estate company in Kansas City. "It has entirely transformed what's going on down here."

In fact, the district is only one piece of a big downtown redevelopment puzzle. Others include the new glass-encased, 18,500-seat Sprint Center next door to the Live block, an interactive college basketball museum, a convention center expansion, a new headquarters for tax giant H&R Block, a new performing arts center and a push to build a critical mass of people living downtown.

Kansas City's downtown problems far outstripped any issue in the Rose Quarter. Yet many of Portland's development goals are similar -- revitalizing a moribund area with regular activity, spurring convention sales and jump-starting nearby development. The Blazers also describe similar ingredients -- an entertainment block, a Nike museum, retail, restaurants and a boutique hotel.

The Power & Light District is credited with helping the city increase convention bookings by 30 percent in 2008, which represents an 80 percent increase in convention-related room days for local hotels.

But as a local gathering spot, it's still a work in progress. The district draws a decent lunch crowd, but weeknights can be slow. And though the district's Live block hosted 150 music events last year and does a brisk business on Friday and Saturday nights, the nearby restaurant row is often sleepy.

On a balmy Friday night in early May, casual dining chains such as Chipotle Mexican Grill and Ted's Montana Grill are moving burritos and bison burgers.

But at the 801 Chop House, which features a long wine list, curtained-off dining alcoves and 22 varieties of steaks and chops, exactly three tables are occupied at 8 p.m. Across the street at the Bice Italian Cafe, it's the same story.

High-end dining isn't the district's only sore spot. City officials say retail has been slow to materialize, too. There's the new grocery store and a JoS. A. Bank men's clothing outlet. But Cordish marketing posters festoon empty storefronts imploring people to "Take the new downtown for a test drive."

Blake Cordish, a vice president in the family business, contends that the district has been phenomenally successful given the state of the economy. Though other leading developers are going bankrupt, "our portfolio is thriving."

Cordish says 90 percent of the Power & Light District is leased, including tenants who have committed or are building out their space.

City officials figure only 72 percent of the space is occupied and say Cordish has made many pronouncements about tenants and occupancy rates that didn't pan out in the past.

"Missouri's motto is 'Show Me,'" said Missy Wilson, vice president of development services at Kansas City's Economic Development Corp. "The public will believe it when they see it."

In the meantime, Cordish has sued the county over its property taxes, as well as the owners of the Bice Bistro for back rent and the costs of finishing the restaurant and adjoining gelato cafe.

The contractor who did much of the nearly $3 million build-out of the 801 Chop House has sued the restaurant's owners and Cordish for failure to pay for $600,000 in work.

The real red ink, however, is at the city, which was looking for sales taxes generated in the district to pay three-quarters of its bond payments. In the first year of the district's operation, sales tax revenue fell 84 percent short of its projections, forcing the city to exhaust a reserve fund and tap its general fund for an additional $4.7 million to meet debt payments. This year, even with more bars and restaurants open, it forecasts a $7 million to $10 million shortfall.

"I think the City Council made some decisions that were socially driven and not necessarily business driven," said Jeffrey Yates, Kansas City's finance director. "While we're recognizing now it's going to cost the general fund, everyone realizes that it's better than what we had."

"It will fail"

Last fall, a party of Portlanders from City Hall, the Portland Development Commission and the Trail Blazers flew to Kansas City for two days to see the Power & Light District in action.

The conclusion they communicated repeatedly to Cordish: "Interesting, it appears to be successful here," said Tom Miller, chief of staff for Mayor Sam Adams. "But if you want to cookie-cutter it and drop it into Portland, it will fail."

There's no intention of doing that, said Blake Cordish. The company approaches each development as a clean sheet and tailors it to a city's culture, but he's not ready yet to say what Cordish might build in the Rose Quarter.

The Power & Light District has local flavor sprinkled in, but the taste hardly screams Kansas City. There's no blues room in the Live block, for instance. And in a town where good ribs means Arthur Bryant's or Gates, the barbecue joint is a franchise called Famous Dave's.

There are good reasons for that. Cordish isn't allowed to cannibalize tenants from competing entertainment zones in the city. And the rents the company charges are unacceptably high for many local restaurateurs, according to Michael Smith, an award-winning chef who owns two nearby restaurants.

Cordish's equity interest in the district makes the company a true partner with a long-term interest in its success. And the company has developed the expertise and contacts to constantly refresh its entertainment programming. But its approach isn't without controversy.

Local restaurant and bar owners in Louisville and Kansas City complain that the city-subsidized Live districts lure away their customers. Cordish also stepped on toes by establishing a dress code that prohibits hoodies, white T-shirts and baggy pants.

"The African American community took that as a slap in the face," said Dell Johnson, a 32-year-old African American who was checking out the Power & Light District with his wife, Jeni.

Cordish doesn't apologize for the company's policies. And he points out that the Power & Light District recently won an award of excellence from the industry's most prestigious think tank, the Urban Land Institute.

Cordish said the project continues to gather momentum each week, and will continue to do so as the recession ends and the Sprint Center gets an anchor tenant.

The Live block formula certainly seems to work on a Friday night: An overflow throng two-steps at the PBR Big Sky country bar. At the Howling at the Moon, waitresses dance on the bar and the dueling pianists whip the crowd into a full-throated singalong. Outside Angel's Rock Bar, a hostess in a pink string bikini jiggles to a guitar riff.

Jennifer Anderson loves the place. She works close by, comes for lunch regularly and was celebrating her 32nd birthday there.

"Everything is close by," she said. "You can pick and choose what your vibe is, and get a cab to take you home."

Christopher Nichols, a tattooed 25-year-old, isn't so sure. He'd been to the district twice before and said he was giving it a final chance. Everything looks the same, he said, "but the chicks wear different clothes."

"The Kansas City crowd is over there," he said, pointing south to the Crossroads District, a more Portland-style mixture of art galleries, bars, restaurants and condos.

"And the Johnson County (suburban Kansas) people are here. They come from outside Kansas City and want a very sheltered environment. It's a tourist trap."